The semiconductor equipment industry is an important part of the overall semiconductor market, with semiconductor chipmakers investing 20% of their sales in obtaining manufacturing equipment. The equipment manufacturing companies are leading the development of most core process technologies in the semiconductor market. The semiconductor production equipment industry is divided into front-end and back-end process equipment. The front-end process includes advanced technology and integration. Investment in front-end equipment is more than back-end equipment, with 60% of the total investment made for front-end equipment. The front-end process is subdivided into front-end-of-the-line (FEOL) and back-end-of-the-line (BEOL).

Technavio’s analysts forecast the global front-end-of-the-line (FEOL) semiconductor equipment market to grow at a CAGR of 1.78% during the period 2016-2020.

Covered in this report

The report covers the present scenario and the growth prospects of the global front-end-of-the-line (FEOL) semiconductor equipment market for 2016-2020. To calculate the market size, the report considers revenue generated from the sales of FEOL semiconductor equipment.

The market is divided into the following segments based on geography:

Americas

APAC

EMEA

Technavio's report, Global Front-End-Of-The-Line (FEOL) Semiconductor Equipment Market 2016-2020, has been prepared based on an in-depth market analysis with inputs from industry experts. The report covers the market landscape and its growth prospects over the coming years. The report also includes a discussion of the key vendors operating in this market.

Key vendors

Applied Materials

ASML

KLA-Tencor

Lam Research

Tokyo Electron

Other prominent vendors

Dainippon Screen Manufacturing

Hitachi High-Technologies

Nikon

Hitachi Kokusai Electric

Market driver

Increase in number of fabs worldwide

For a full, detailed list, view our report

Market challenge

High cost of equipment

For a full, detailed list, view our report

Market trend

Proliferation of automotive electronics

For a full, detailed list, view our report

Key questions answered in this report

What will the market size be in 2020 and what will the growth rate be?

What are the key market trends?

What is driving this market?

What are the challenges to market growth?

Who are the key vendors in this market space?

What are the market opportunities and threats faced by the key vendors?

Commenting on the report, an analyst from Technavio’s team said that proliferation of automotive electronics is one of the trends spurring growth for the market. The automotive market is going through a lot of changes with electronics such as advanced driver assistance systems (ADAS), connected vehicles, and electric energy, having good growth potential. In the future, most of the automobile buying decisions will be made based on the electronics content of the vehicles and the associated services. In 2015, 70 million units of cars were sold globally, and 73.54 million units will be sold in 2016. The semiconductor content will increase in vehicles during the forecast period.

According to the report, increase in number of fabs worldwide is a key driver aiding to the growth of this market. Financial services are one of the most data-intensive industries. The semiconductor market will see a high demand for semiconductor chips and memory devices from 2017 onward due to the growing adoption of IoT, high demand for connected devices, and increased vehicle automation. Semiconductor device manufacturers are increasing their capital spending by expanding their production facilities or constructing new fabs. The majority of the investment for new facilities will be for the development of memory and logic ICs due to their high demand.

Further, the report states that high cost of equipment is challenge the market is facing. Semiconductor manufacturing equipment is expensive. The cost of constructing a semiconductor fab is between $3 and $4 billion, with equipment accounting for the majority of this cost. By 2020, a semiconductor fab will cost around $20 billion. This is because of the growing adoption of 3D packaging solutions like TSV, stacked packaging, flip chip packaging, and MEMS packaging, which require upgraded equipment. The price of equipment varies widely, depending on its function. For instance, the equipment used in front-end wafer fabrication are relatively more expensive than back-end testing and assembly equipment. This is due to the high level of sophistication of the operations they perform.